Mortgage Redraw vs Personal Loan for Home Improvements — Full Cost Comparison

General information only — not financial advice. Seek independent advice before making financial decisions.

Is it better to use redraw or a personal loan for a kitchen renovation?

Redraw wins on cost if repaid within 3–4 years. A $35,000 kitchen via active redraw repaid in 3 years costs ~$3,400 in interest vs ~$9,700 for a 5-year personal loan at 10.5%.

When should I use a personal loan instead of redraw?

Personal loan wins if you're on a fixed rate (no redraw), if you won't maintain extra repayments, or if you're an investor where redraw would contaminate tax deductibility.